Shame On Irs For Premature Bill

December 26, 1994

The Internal Revenue Service has reached a new low in bureaucratic insensitivity by dunning survivors of the 1988 Pan Am bombing victims for taxes on income they may never receive. And during the holiday season, too.

For shame!

John and Barbara Zwynenberg of Nyack, N.Y., whose 29-year-old son Mark was among the 270 people killed when a terrorist bomb exploded aboard Pan Am Flight 103 over Scotland on Dec. 21, 1988, received a tax bill for $6.4 million from the IRS last month.

The feds assert they were simply staking their legitimate tax claim to any money Mark Zwynenberg's estate may receive from judgments in lawsuits filed by survivors against the defunct airline and its insurers. No payment has yet been made to the estate and the size of any potential settlement has not been determined.

The IRS demand anticipated the Zwynenberg estate would receive a court-ordered payment of about $11 million and computed the estimated tax bill accordingly.

Under current law, the family's only recourse is either to pay the bill or file an appeal with the U.S. Tax Court. After filing, they would be relieved of making any payments until a final decision on their tax liability was rendered.

But why should the survivors have to shell out additional fees to lawyers and accountants in order to avoid paying taxes on non-existent income?

The simple answer is that they shouldn't. If, as the IRS contends, it is required by law to make such an outrageous claim and is barred from granting extensions to estates, then the law should be changed.

Meanwhile, in punishment for its exquisitely bad timing, the IRS deserves nothing from Santa Claus this year other than a lump of coal and a trip to the woodshed.